Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.

Dairy markets seemed to be between a rock and hard place the past couple of weeks, with fundamentals mostly bearish due to the strong U.S. Dollar and lack of exports, while futures have been moving higher. Perhaps this was a bounce in an oversold market? Or perhaps the international markets bottoming out a few weeks ago were a sign of things to come? I’m not sure we’ve got a clear answer. A bullish Milk Production report, bearish Cold Storage report, firm international prices, but plenty of product reportedly available make it a tough time to get a handle on prices.

The Class III futures Q2 2015 pack closed last week at $15.75/cwt., sharply lower on Thursday/Friday, but 21¢ higher week over week.

Cheese futures closed the week sharply lower, but week over week the 2Q 2015 pack was 1.3¢ higher, to $1.6150/lb.

Dry whey futures finished the week mostly lower, and the market looks as though it may be ready to pull back after the recent rally.

NFDM futures popped to $1.20/lb. during the week, bringing out the sell side,and then closed the week out with limit losses on a number of contracts.

As was the case with a number of dairy futures markets, butter futures spiked higher to begin the week, only to sell off ahead of the Cold Storage report. Based the announced stocks relative to our estimates, it certainly looks like butter has some room to the downside.

   

Feb. 20 spot session results:

Block cheese: $1.5450 (up 0.5¢)

Barrel cheese: $1.4850 (unchanged)

Grade A NFDM: $1.1100 (down 4.0¢)

Butter: $1.7225 (unchanged)

 

Today's expectations:

• Class III to open steady to lower

• Cheese futures to open mixed but mostly lower

• Dry Whey futures to open steady

• Butter futures to open steady to a penny lower

• Class IV futures to open softer

• NDFM futures to open slightly lower

 

Grain futures

It was a mostly sideways week for the grain markets, which closed on a lower note. Friday saw corn down 4.5¢ at $3.8525/bushel, and soybeans were down 8¢, at $9.9925/bushel.

 

Today’s expectation:

• Corn & Soybeans futures to open mixed

 

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